Researchers question Bank’s policies based on its flawed reports
Rajesh Sinha. New Delhi
A little publicised World Bank report released in December 2006 has found
serious shortcomings in the studies published by the organisation. The study
was conducted by a panel of 24 researchers led by Professors Abhijit
Banerjee (MIT), Angus Deaton (Princeton University), Nora Lustig (UNDP) and
Ken Rogoff (Harvard University).
The evaluators have analysed some high-profile researches conducted by the
Bank over the past decade. Of Dollar and Burnside’s paper, “Aid, policies
and growth,” which the Bank has cited repeatedly to argue for increased
support for countries with ‘good policies’, they say, “We think that the
Bank was unwise to place so much weight on one paper whose evidence is so
unconvincing.” The implications for the Bank, according to the evaluators,
are alarming. “Once the evidence is chosen selectively without supporting
argument, and empirical scepticism selectively suspended, the credibility
and utility of the Bank’s research is threatened,” they opine. On Dollar and
Kraay’s research providing support to the Bank’s arguments that trade
liberalising countries show greater poverty reduction, they say, “Much of
this line of research appears to have such deep flaws that, at present, the
results cannot be regarded as remotely reliable.”
The evaluators have also found that in addition to misplaced advocacy, the
Bank’s trade work has “insufficiently addressed the effects of trade on
poverty”, and has been dominated by arcane computable general equilibrium
models. Dissenting research conducted within the Bank, such as that by
Branko Milanovic, has been routinely “ignored”.
Researches on pensions and insurance have also come in for heavy criticism.
“The analytical errors referred to are those that would be well understood
by a first-year graduate student in economics,” the researchers say. On the
Bank’s work on poverty mapping, they recommend “that this work be put on
hold until the statistical problems are resolved.”
They also say that the Bank’s work on pensions “produced a great deal that
was useful, but balance was lost in favour of advocacy. Some
technically-flawed projects have run for years, and have been incorporated
into country work without appropriate certification and review.”
There is much selection of evidence, with obscure, sometimes unpublished,
studies with the “right” message given prominence over better and often
better-known studies that come to the “wrong” conclusion, the evaluators
say. Conditions under which research is done: The report quotes from a 1997
paper – “The World Bank as Intellectual Actor” – by Nicholas Stern (before
he became the Vice President for Research at WB) and Francisco Ferreira
about the difficulties of doing research in the World Bank.
“Researchers are not free to follow intellectual inspiration. They are under
constraints of designated priorities and of an apparent need to be
immediately useful to operations. Further there is the strong hierarchy and
an atmosphere much more deferential than would be found in universities.
Among researchers there is considerable concern with what superiors will
think of conclusions reached, to the occasional detriment of whether an
analysis is sound,” says the paper.
Stern says, “The superiors themselves are sometimes under pressure from the
Bank Presidency and elsewhere not to say things that go directly against the
broad policy line that the Bank is espousing.”